Like all of us, you've had good gains in real estate.
Do you seriously contend that these gains are sustainable?
I don't.
I've mentally marked down my current gains.
If you think things are fine and getting better, you are simply not paying attention or simply influenced by your dislike for Jay. Forget about that and look at facts.
I am not saying TEOTWAKI is here or around the corner - I have no opinion on that - but I can say with confidence that things are not good and are not getting better for most Americans.
Look at the value of the dollar.
Look at the stock market.
Look at the trade deficit.
Look at government debt and spending.
Look at the credit imbroglio.
Look at the banks.
Look at real estate on a nation-wide basis.
Look at growth.
Look at inflation.
Look at food costs.
Look at oil and gasoline prices.
Look at what the BIS - the most objective outfit out there - has to say.
Look at what the Concord Coalition has to say about our national debt and its influence on national prospects:
concordcoalition.org
If you disagree, tell me why things are so great.
You like to stake out positions and reflexively defend them regardless of the merits. No malice here at all in that comment, simply an observation born of experience. But you are not stupid, and I'm a man on a mission to convert as many smart people as I can to our economic problems for they will be inherited by our sons and daughters. We owe them, at a minimum, the time to become informed and vocal about the perils we face.
Read this [the quote that follows is a blurb from the linked article]:
Message 24703302
Let's take a quick look at BIS working paper number 137, "The Great Depression as a Credit Boom Gone Wrong", published in 2003 by BIS author's Barry Eichengreen and Kris Mitchener. In that delightful read (published right before the U.S. housing boom went parabolic) the Bank tells us how credit bubbles lead to real busts.
"A capsule account of the role of credit in macroeconomic cycles, as informed by the experience of the 1990s, would go something like this. There is first an upswing in economic activity. As the economy expands, banks and financial markets provide an expanding volume of credit to finance the growth of both consumption and investment, particularly where regulation is lax and competition among bank and nonbank financial intermediaries is intense."
"Whether because the exchange rate is pegged or for other reasons such as a positive supply shock, upward pressure on wholesale and retail prices is subdued. Hence, the central bank has no obvious reason to tighten and stem the growth of money and credit, leading to a further expansion of output and further increase in credit."
"Higher property and securities prices encourage investment activity, especially in interest-sensitive activities like construction. But, as lending expands, increasingly risky investments are underwritten. The demand for risky investments rises with the supply, since, in the prevailing environment of stable prices, nominal interest rates and therefore yields on safe assets are low.
"In search of yield, investors dabble increasingly in risky investments. Their appetite for risk is stronger still to the extent that these trends coincide with the development of new technologies, in particular network technologies of promising but uncertain commercial potential."
"Eventually, all this construction and investment activity, together with the wealth effect on consumption, produces signs of inflationary pressure, causing the central bank to tighten. The financial bubble is pricked and, as asset prices decline, the economy is left with an overhang of ill-designed, non-viable investment projects, distressed banks, and heavily indebted households and firms, aggravating the subsequent downturn." |
